Business Ethics (BUSG 210) Chapter 6
Under the Federal Sentencing Guidelines for Organizations, the death penalty
is warranted where the organization was operating primarily for a criminal purpose.
Which of the following legislations required full disclosure of funds that were taken out of or brought into the United States before the Foreign Corrupt Practices Act was introduced?
the Bank Secrecy Act
Which of the following is a legislation that was introduced to control bribery and other less obvious forms of payment to overseas officials and politicians by American publicly traded companies?
the Foreign Corrupt Practices Act
Which of the following key U.S. legislations is an attempt to discourage, if not prevent, illegal conduct within organizations?
the U.S. Federal Sentencing Guidelines for Organizations
The maximum penalty that a judge can impose upon an organization for violating the Federal Sentencing Guidelines for Organizations is a penalty worth
the full amount of the organization's assets.
The culpability score of an organization can be decreased if
the organization had an effective program to prevent and detect violations of law.
The ________ refers to the legislation that was promoted as the "fix" for the extreme mismanagement of risk in the financial sector that led to a global financial crisis in 2008-2010.
Dodd-Frank Wall Street Reform and Consumer Protection Act
Which of the following is true of the Sarbanes-Oxley Act (SOX)?
It protects employees of companies who provide evidence of fraud.
Sebastian and Amy are arguing over secondary legislations that were in place prior to the passing of the Foreign Corrupt Practices Act (FCPA). Amy is of the opinion that the FCPA encompasses all secondary measures that were in use to prohibit corrupt practices. Sebastian disagrees with Amy on this point. Which of the following, if true, would strengthen Amy's argument?
The FCPA requires corporations to fully disclose all transactions conducted with foreign officials in line with the SEC provisions.
In September and October 2008, financial markets around the world suffered a severe crash as
there was aggressive lending to subprime borrowers in a deregulated environment.
Which of the following is true of the effective compliance program prescribed by the Federal Sentencing Guidelines for Organizations?
A high-level official (such as a corporate ethics officer) must be in charge of and accountable for the compliance program.
Grease payments are illegal under the Foreign Corrupt Practices Act.
FALSE
Prior to the passing of the Foreign Corrupt Practices Act, the Securities and Exchange Commission was not authorized to penalize company executives for failing to disclose payments under its securities rules.
FALSE
Prior to the passing of the Foreign Corrupt Practices Act, making illegal payments to foreign officials was not punishable through any type of legislation.
FALSE; Prior to the passing of the Foreign Corrupt Practices Act, bribery and making illegal payments to foreign officials were punishable through "secondary" sources of legislation.
The authority of the Consumer Financial Protection Bureau does not extend to examining and enforcing regulations for banks and credit unions if their assets exceed $10 billion.
FALSE; The responsibilities granted to the Consumer Financial Protection Bureau are extensive and include authority to examine and enforce regulations for banks and credit unions with assets over $10 billion.
The sentence of an organization punished under the Federal Sentencing Guidelines for Organizations is calculated through a three-step process: determination of mitigating factors, evaluating the credit rating, and the determination of base fine.
FALSE; The sentence of an organization punished under the Federal Sentencing Guidelines for Organizations is determined through a three-step process: determination of the base fine, computation of the culpability score, and determination of the total fine amount.
The culpability score, according to the Federal Sentencing Guidelines for Organizations, is the calculation of an organization's degree of blame or guilt, and it is a multiplier of the base fine up to 40 times.
FASLE; The culpability score of the Federal Sentencing Guidelines for Organizations is the calculation of the degree of blame or guilt used as a multiplier of up to 4 times the base fine.
Which of the following statements is true of the culpability score?
It can be increased or decreased according to predetermined factors.
Which of the following statements is true of the Foreign Corrupt Practices Act?
It encompasses all the measures that were previously used to control unethical overseas transactions by U.S. corporations.
Which of the following is true of the penalties under the Foreign Corrupt Practices Act?
Officers, directors, stockholders, employees, and agents are subject to a fine of up to $250,000 per violation and imprisonment for up to five years.
The creation of the ________ was an attempt to reestablish the perceived independence of auditing companies after the corporate accounting scandals of the early 2000s.
Public Company Accounting Oversight Board
A company can be found in violation of the Foreign Corrupt Practices Act even if its bribe is unsuccessful.
TRUE
According to the Federal Sentencing Guidelines for Organizations, criminal offenses, whether actual or suspected, must generate an appropriate response, analysis, and corrective action in order to establish an effective compliance program.
TRUE
As an oversight board, the Public Company Accounting Oversight Board (PCAOB) was charged with maintaining compliance with established standards and enforcing rules and disciplinary procedures for those organizations that found themselves out of compliance.
TRUE
In its mission to promote ethical organizational behavior and increase the costs of unethical behavior, the Federal Sentencing Guidelines for Organizations establishes a definition of an organization that is so broad as to prompt the assessment that "no business enterprise is exempt."
TRUE
The Federal Sentencing Guidelines for Organizations table factors in both the nature of the crime and the amount of the loss suffered by the victim.
TRUE
The Foreign Corrupt Practices Act encompasses all the secondary measures that were in use to prohibit bribery and other illegal forms of payment to foreign officials by focusing on two distinct areas—disclosure and prohibition.
TRUE
The Volcker rule proposed that there should be a key restriction in the legislation to limit the ability of banks to trade on their own accounts.
TRUE
The guidelines developed by the U.S. Federal Sentencing Commission, which became effective on November 1, 1987, consisted of seven chapters and applied only to individuals convicted of federal offenses.
TRUE
Under the Foreign Corrupt Practices Act, facilitation payments are payments that are acceptable (legal), provided they expedite or secure the performance of a routine governmental action.
TRUE
Which of the following is true of facilitation payments under the Foreign Corrupt Practices Act (FCPA)?
The FCPA finds them acceptable if they expedite a routine governmental action.
Which of the following government agencies jointly enforce the Foreign Corrupt Practices Act?
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC)
Which of the following is a difference between grease payments and bribes under the Foreign Corrupt Practices Act?
Unlike grease payments, bribes induce foreign officials to act in violation of their lawful duty.
Which of the following responsibilities was granted to the Consumer Financial Protection Bureau (CFPB)?
authority to examine and enforce regulations for banks and credit unions with assets over $10 billion
Title VIII of the Sarbanes-Oxley Act addresses issues related to ________.
corporate and criminal fraud accountability